2010 ended with a thud for online poker players in the United States. There was a great deal of anticipation over Senate Majority Leader Harry Reid’s attempt to push an online poker bill through before Congress adjourned for the year, but to the dismay of many, nothing ever came of it. To others, the bill was terrible, so even though they were happy it died, the sheer fact that it was even up for discussion was disheartening. So, online poker legislation is done for a while, right? In the immortal words of ESPN’s Lee Corso, “Not so fast, my friend.”
This week turned out to be a historic one for online poker, as the New Jersey legislature passed the United States’ first intrastate internet gambling bill, which makes online gambling, including poker, legal within state borders. I suppose we should call this week “potentially” historic, as Governor Chris Christie still needs to sign the bill into law. Most think he will despite his possible Presidential aspirations (being the lead dog on internet gambling might not sit well with his conservative Republican constituency).
If Governor Christie does give the bill his blessing, is it good or bad? Here are my initial thoughts, but I urge you to keep in mind that I am neither a political nor a legal expert by any stretch of the imagination.
Fears
It appears that once everything is in place, only online casinos and poker rooms licensed by the state of New Jersey and with their servers, facilities, and employees located in New Jersey will be able to offer games. And the only people allowed to participate in those games will be those located within the state’s borders. Thus, the big question for me is will New Jersey residents still be able to play at other offshore online poker rooms or will they be restricted to New Jersey-based sites?
If, when all is said and done, rooms like PokerStars and Full Tilt Poker decide to extricate themselves from New Jersey, a small, but not quite insignificant chunk of players would be removed from the worldwide player pool. One report out of Iowa, another state considering online gambling legalization, stated that 150,000 people, or approximately 5% of that state’s population, gamble online.
If we apply that to New Jersey, that means over 400,000 potential players would not be available for the rest of world to play against. Even if we pare that down some to weed out those who don’t play poker, it is still a decently sized figure.
Even if losing a few hundred thousand players doesn’t seem like that big of a deal, what if other states see that New Jersey pulled it off and pass their own legislation, ring fencing their residents? Florida, California, and the previously mentioned Iowa have all been considering such measures. Those three states combined make up almost one-fifth of the entire U.S. population. The hit to the status quo would definitely be felt if more states followed New Jersey’s lead and the current U.S.-facing rooms exit the market.
Hopes
On the other hand, other states falling in line could result in significant gains by poker players in the long-term. Should everything go smoothly, the rest of the Union might decide to give internet gambling, or at least internet poker, a chance. Possible negative reaction from some will subside when the positives outweigh the negatives. For example, in Georgia, the lottery-funded HOPE Scholarship is running out of money. Revenue from internet gambling could breath new life into it, as well as the Georgia Pre-K program, which is also funded by the state lottery. Opponents of gambling like to say, “Won’t anyone think of the children?” Well, here you go.
Naturally, poker rooms confined to the borders of a state won’t have the liquidity of a site that can reach to the four corners of the globe. Thus, the states that do allow online poker will need to bring in more players somehow. One way to do this would be to join forces and create an interstate online poker room a la multi-state lotteries like Mega Millions. Whether this could jive with Federal law remains to be seen, but if enough states wanted it to happen, I could see the law getting changed.
Of course, if we reached that point, I think it would be a distinct possibility that online poker legislation would be revisited, and passed, on a Federal level.